Adeno-associated virus type 2 (AAV2) preferentially integrates its DNA at a 4 kilobase region of human chromosome 19, referred to as AAVS1. Site-specific integration at AAVS1 requires the AAV2 replication (Rep) proteins and specific sequences within AAVS1. AAVS1 contains a 16 bp Rep recoginition sequence (RRS) and closely spaced Rep nicking site (also referred to as terminal resolution site, or trs). A short (33 bp) AAVS1 sequence that includes the RRS and trs is sufficient to target integration into an episome in the presence of Rep proteins. Most AAV2-AAVS1 junctions are characterized by short microhomologies and map to the 145 bp inverted terminal repeats (ITRs) present on each end of the 4.7 Kb, single-stranded DNA, AAV2 genome. The ITRs are necessary for AAV2 replication and packaging. Each ITR also contains an RRS and trs. Both elements are required for replication and packaging. We hypothesized that the DNA sequences containing the RRS and nicking site in the ITR and in AAVS1 are functionally interchangeable, even though they differ in their exact base sequence and the distance between the RRS and trs. To test this hypothesis, we replaced an 84 bp region of the ITR sequence with a 50 bp region of AAVS1 DNA. This substitution was made in one or both ITRs. When a single ITR was modified, one strand of the virus DNA was preferentially packaged. The overall production of packaged genomes was similar with one, two or no modified ITRs, suggesting that preformed capsids, into which the viral DNA is loaded, may be limiting. Replacement of the ITR sequence with AAVS1 DNA did not have a measurable effect on preferential integration into AAVS1. [unreadable] The Rep68 and Rep78 proteins (Rep68/78) of AAV2, when expressed at high levels in mammalian cells, inhibit cell division and may induce apoptosis. Rep68/78 can bind DNA in a sequence-specific fashion and unwind double-stranded DNA or RNA/DNA hybrids through their helicase activity. We constructed plasmids encoding wild-type Rep68 or versions of Rep68 with mutations in conserved amino acids within the helicase domain. These plasmids were cotransfected with a geneticin resistance plasmid into human 293 cells. The abilities of mutant Rep68 proteins to block geneticin-resistant colony formation inversely correlated with the ability of each mutation to impair the helicase activity of purified maltose binding protein-Rep68 fusion proteins produced in Escherichia coli. We therefore speculate that the Rep68/78 helicase activity may block cell division by unwinding RNA primers that are required for cellular, but not AAV2, DNA replication.